Saturday, 31 December 2016

December 31, 2016 – Weekend Market Comment

December 31, 2016 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. You can read the latest version each week by bookmarking http://cme4pif.blogspot.ca/. For full details read my disclaimer (link at the bottom of this page).

Despite a lackluster day in the stock market, the Dow finished 2016 up 13.42 percent, while the S&P 500 narrowly missed out on ending the year with double-digit gains. The Nasdaq Composite, meanwhile, wrapped up 2016 with a net gain of 7.5 percent. The Dow ended the day down 57.18 points at 19,762. It had been on pace to end the year 14 percent higher, but instead finished only 13.42 percent higher after its first down week since the election. The S&P fell about 10 points, or about half a percent, on Friday, after ending Thursday down less than a point at 2,249. In order to gain 10 percent for the year, the index had to close at 2,248.33, but it finished at 2,238.83. The index now has four positive years in the past five. The Nasdaq closed 48.97 points lower on Friday, down 0.9 percent. Still, it notched its fifth positive year in a row for the first time since its five-year streak that ended in 2007.
Lets see what our charts say:






101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend.  NOTICE THE SLOPE (second window), we might be at the end of the uptrend, a very long term uptrend.  Bull market -- expect bullish outcomes.

103 NYSE High Low Market Forces
Breadth is still with us, don't panic yet. Nothing but strength. 

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.
!
107 Industrial Production
Beginning to be disturbing -- manufacturing is lagging.  Could this be the first canary in a coal mine signal?

115 Renko
Market is strong lucky 13 white bricks! You seldom see a run this long, but who knows how far this bull can run. Notice how it is obvious on a Renko chart. SUPER BULLISH!

203 OBV
OBV (red line) is happy. Yes despite year end profit taking the big boys are still on board. Bullish!
!
207 VIX
Fear is up a bit... but will this fade with new positions in 2017. Notice the last two weeks of September, when the bears got trounced by Trump. For now Neutral

209 VIX Evaluator
Very much bullish. 2016 was a mostly up market years.

!
211 S&P500 over 50 day
Now about 66% of stocks are above their 50day MA, down from last week when it was 74%. Bearish.

213 Green Arrow
Only put new money to work when I draw a green arrow. TRIX says green light, could be a green arrow soon.

!
301 NASDAQ Summation
Nasdaq breadth stalls. NASTY
!
303 Aggressive Defensive
Very defensive. Bearish

305 Consumer Bonds vs Equities
Bonds up. Consumer deflating? Bearish

307 Bond Direction
Bonds look better.

309 Sectors
It all sucks except for banks.

311 Nations
USA bets are off.

313 Major sectors
Canada perks up.. more safe-haven plays and good news in gold, silver, oil and coal.

! = Pay attention this chart is important this week.




What I Find Interesting


Follow the money
This chart shows all the worlds Billionaires and where they got the money from. This chart is courtesy of the good folks at HowMuch.net How Much is a cost information website.


Isagenix 
Isagenix is an MLM scam operating in 12 countries and selling products that claim to make you wealthy and are good for your health, in fact neither is true. Read more in my Thoughts Blog
http://cme4pif-thoughts.blogspot.ca/2016/12/isagenix-rant.html?view=sidebar

France Underconsumes
In 2005, the real GDP per capita in France was only 67 percent that of the United States, and real consumption per capita (a more-direct measure of living standards) was only 60 percent as high, making it appear Americans were economically much better off than the French on average. However, that comparison omits other relevant factors; leisure time, life expectancy, and economic inequality. The French take long vacations and retire earlier, so typically work fewer hours; they enjoy a higher life expectancy at birth (80 years in 2005, compared to 77 in the U.S.), presumably reflecting advantages with respect to health care, diet, lifestyle, and the like. Hmmm consume less and live longer... who knew? Also income and consumption are somewhat more equally distributed there than in the U.S. Because of these mitigating differences, comparing France’s per capita GDP or consumption with the U.S.’s overstates the gap in economic welfare, or at least miss the point, there is a point of simply over-consumption.


You Have A Second Brain
Research shows that "gut" feeling you have might really be as important as the feelings you have in your brain. Click below to play this video, amazing stuff!
 



What Works Now


Canada
Canadian equities rose 18 percent in 2016, the biggest increase since 2009. The index now sits less than 3 percent from a record reached in September 2014. The S&P/TSX’s world-beating advance marks a reversal for the index, which slipped 11 percent in 2015 for its worst annual decline since 2008.

Safety and Commodities
The safety plays are all getting a recent boost, the only question is, is it a new trend or a "fast money" reaction to a pull back.
Gold:

Oil:

Bonds:


 

What I Think
When we look back on 2016. There were lots of great buying opportunities. After years of commodities being routed, it was a year for commodities to create fantastic returns. In 2013 I wrote "The New Momentum" that showed that high oil prices are a kind of tax on the economy. I notice today the new commodity rush as we begin 2017 is focused on safety assets, Oil, Gold and Bonds (see above) yet general commodities like coco and coffee are not moving in fact they are depressed. This is not a sign of global demand, its a sign of concern. We have had a bull market since spring of 2009, that's a near record 8 year run(third best ever), this coming year might be a great time to be prudent and not buy in to the hype


That is not to say that the end of year pull back we saw this week was anything more than tax selling. I would not be surprised to see next week down or up, but I do think next week will set a tone for the first quarter of 2017. As I said before I am long but cautious.  But long term I would be amazed if this bull continued through all of 2017. So strap in and lets see what the new years baby has for us!



You can learn more about my indicators by visiting the CME4PIF school by clicking here.


Don't squint, All graphics can be enlarged by click on them.


Read My Disclaimer Here

Saturday, 24 December 2016

December 24, 2016 – Weekend Market Comment

December 24, 2016 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. You can read the latest version each week by bookmarking http://cme4pif.blogspot.ca/. For full details read my disclaimer (link at the bottom of this page).

U.S. equities closed mostly flat on Friday ahead of the Christmas holiday, as the Dow Jones industrial average failed again to reach the psychologically important level of 20,000.


Investors stepped back from a postelection rally boosted by expectations that President-elect Donald Trump's policies would stir up growth and inflation. Optimism had also flooded the market amid possible tax cuts and deregulations. The decline pulled the Dow further away from its psychologically important level of 20,000, while the S&P 500 and the Nasdaq booked their first successive losses in three weeks. The broader market dwindled in recent sessions amid thin volumes ahead of the holiday season in December, while investors also digested a slew of economic data. 

Lets see what our charts say:






101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend.  NOTICE THE SLOPE (second window), we remain in an uptrend, a very long term uptrend.  Bull market -- expect bullish outcomes.
!
103 NYSE High Low Market Forces
Wow look at this take off. Gone is the weakness from early November. Nothing but strength. 

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.
!
107 Industrial Production
Beginning to be disturbing -- manufacturing is lagging.  Could this be the first canary in a coal mine signal?

115 Renko
Market is strong 12 white bricks! You seldom see a run this long, but who knows how far this bull can run. Notice how it is obvious on a Renko chart. SUPER BULLISH!

203 OBV
OBV (red line) is happy. The hedge funds are wading in knee deep. But notice how obvious the sideways market is.Bullish!
!
207 VIX
Fear is gone... everyone is long. But notice we probably have 2 weeks until a return of fear. For now Bullish

209 VIX Evaluator
Very much bullish. 2016 was a mostly up market years.

211 S&P500 over 50 day
Now about 74% of stocks are above their 50day MA, about even with last week when it was 73%. Bullish.

213 Green Arrow
Only put new money to work when I draw a green arrow. TRIX says green light, could be a green arrow soon.

!
301 NASDAQ Summation
Nasdaq breadth stalls. CAUTION
!
303 Aggressive Defensive
Very defensive. Long but in safe choices.

305 Consumer Bonds vs Equities
Bonds bottom. Consumer deflating? Sorta cautionary.

307 Bond Direction
Weakness in bonds indicates overall market caution of current and future rate hikes.

309 Sectors
Small gains in Defensive and Utility stocks. Consumer tanks, not good at Christmas.

311 Nations
Germany and USA are safe-haven bets

313 Major sectors
Canada perks up.. more safe-haven plays and good news from Trump on pipelines.

! = Pay attention this chart is important this week.



What I Find Interesting
Consumers  are Happy
The Index of Consumer Sentiment hit 98.2 in December, the University of Michigan reported on Friday. The figure is up from 93.8 in November's final reading. Economists expected the consumer sentiment index to hit 98 in December's final reading, according to a Thomson Reuters consensus estimate. The surge in confidence following President-elect Donald Trump's surprise election aided in the numbers, the report said. Notice rising confidence and a rising market.


This is a two edged sword, clearly enthusiastic spending consumers are good for the economy - to a point. But also it is a sign of late market and the smart money is often out the door just as Joe average is the most confident. If you buy when there is "blood in the streets" and sell when everyone is sure the market is invincible, of course that is the heart of buy low sell high. 



A thought on Christmas Dinner
I am getting ready for Christmas eve and my thoughts turn to holiday over eating. That uncomfortable feeling of having overeaten is caused by the stomach pressing into surrounding organs - including the liver, diaphragm and lungs. Generally we feel stuffed if we exceed one liter of food -- reaching danger at 4 liters of grub. (a quart is about 4 liters).


Can my stomach burst from over-eating? Sadly, yes. There are cases where the stomach becomes so large that it ruptures from the sheer volume of food within it. One 23-year-old lady had over 2,500ml within her stomach, which caused it to swell so much that it filled the whole of her abdomen, from her ribs to her pelvis. It eventually perforated, necessitating emergency surgery.

Can I die from overeating? Yes, there are a couple of reports of people dying from over-indulging. This is very rare, but it happens. One person died from tearing their oesophagus, the tube that connects the mouth to the stomach and others have actually ruptured their stomach by over-eating.

How Much Can One Eat?
Of course there are ways to pig out beyond Christmas. The most hamburgers eaten in 3 minutes is 12 and was achieved by Takeru Kobayashi (Japan). Mario's CafĂ© in Westhoughton, Bolton UK offers the breakfast blow-out for £10.95. The giant fry-up includes ten sausages, ten eggs, ten rashers of bacon, five black puddings, and piles of beans, mushrooms and tomatoes. However you must sign a health disclaimer before ordering as it contains a heart-stopping 5,000 calories - twice the daily amount recommended for an average male.

One of the largest Christmas meals ever consumed American woman in 2010 consume 50 lbs of turkey, 30 lbs of ham, 35 lbs of potatoes, vegetables, and stuffing, which was then washed down with eight pints of gravy and relish and followed by dessert. This meal consisted of 30,000 calories—to put this into context, males and females are recommended to consume 2,500 and 2,000 calories daily, respectively.

If you would rather dine out, the largest Christmas dinner is a 9.6 kg (21.16 lb) festive feast for one that comprised a turkey, carrots, parsnips, broccoli pieces, cauliflower pieces, roast potatoes, “pigs in blankets” and 25 sprouts. Going by the name of the titanic turkey tea, it is free for anyone who can eat it – solo – within 45 min! It was served by Ashley & Louise Gargan at the Duck Inn, in Oakenshaw, Worcestershire, UK, on 24 December 2013.



What Works Now

Since the market is moving sideways the only good plays are the oversold stocks on a bounce.

Beer
Beer always sells, although this firm is under pressure form mega merge giant InBev, look at Molson Coors Brewing (Ticker:TAP)

Could not resist, a beer pic from my work on SCTV as a teenager.


Brazil
As U.S. markets look overbought and if you think in 2017 commodities will rebound look at Brazil (Ticker:EWZ)

Now that's a good investing climate. . . 


Biotech
The big fear of Hillary Clinton capping drug prices is gone and healthcare is often a safety play. Besides the sector might be oversold. Look at Celgene for its strength of its flagship multiple myeloma drug Revlimid and growth in newer medicines. (Ticker:CELG)

Credit and Debt
With consumer wallet so light this year someone is going to make money when they don't pay. Look at credit giant Dun and Bradstreet.  (ticker:DNB)
   

What I Think
I think this is a bull market and so you must expect positive outcomes. U.S. markets this week had a short-term bearish tone to it, but there were certainly no price breakdowns and no reason to believe it was anything other than a bout of profit taking during a continuing bull market advance.  All of our major indices were lower, but volume on the S&P 500 was a holiday-induced below average level. 


Sure the market has run along way that is why it is consolidating (going sideways) and sure this is one of the longest bull runs in history. It been a long run and the market is tired. But until I see a major problem I am long but cautious.





You can learn more about my indicators by visiting the CME4PIF school by clicking here.

Don't squint, All graphics can be enlarged by click on them.

Read My Disclaimer Here

Sunday, 18 December 2016

December 17, 2016 – Weekend Market Comment

December 17, 2016 – Welcome to my weekend market comment, an analysis tool I use in my own portfolio decisions, published free to the web every weekend before the New York opening bell. You can read the latest version each week by bookmarking http://cme4pif.blogspot.ca/. For full details read my disclaimer (link at the bottom of this page).

Well this has been some week. While traveling in Mexico I found away to wipe out my charts and make them all the wrong format. So from a tablet last night I fixed them up, and today on a WiFi equiped WestJet 737 I was able to post this weeks data. Sweet. Some of the charts look a little different but not in a meaningful way and in some case I think are simpler. 

OK so the Bull has roarded ahead, we had a small down day late in the week but well we were more than over due for it. 






101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a firm uptrend. The new version of the chart no longer shows the recent trend as it is not that important. NOTICE THE SLOPE (second window), we remain in an uptrend,, a very long term uptrend.  Bull market -- expect bullish outcomes.
!
103 NYSE High Low Market Forces
Wow look at this take off. Nothing but strength. 

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.

107 Industrial Production
Strong but not as strong as it was. 
!
115 Renko
Market is strong 10 white bricks! You seldom see a run this long, but who knows how far this bull can run. Notice how it is obvious on a Renko chart. SUPER BULLISH!

203 OBV
OBV (red line) is happy. The hedge funds are wading in knee deep. Bullish!
!
207 VIX
Fear is gone... everyone is long. Bullish

209 VIX Evaluator
Very much bullish

211 S&P500 over 50 day
Now about 73% of stocks are above their 50day MA, backing off from last week when it was 80%. Bullish.

213 Green Arrow
Only put new money to work when I draw a green arrow. TRIX says green light, could be a green arrow soon. Notice how this was a great early warning. 


301 NASDAQ Summation
Yeah its up, but tech is not a happy place now so looks a bit flat.... Bullish
!
303 Aggressive Defensive
Turning very defensive. You will recall 2 weeks ago, I said I was long but profit taking on my high flyers. 

305 Consumer Bonds vs Equities
Bonds bottom. Consumer flat, perhaps ready for a run for Christmas?  Sorta bullish

307 Bond Direction
Weakness in bonds indicates overall market caution of current and future rate hikes.

309 Sectors
Like last week, a move to safety with small gains in Defensive and Utility stocks. Consumer tanks, not good at Christmas.

311 Nations
Germany and USA are safehaven bets

313 Major sectors
Nothing to see here.

! = Pay attention this chart is important this week.



What I Find Interesting

The Death of Newspapers
As print media dies a every faster death, we saw signs of trouble this week at the New York Times, as they announced that 8 floors will be vacated and sublet. As reported in Bloomberg the high tech NYT HQ building built in 2007 is now far too big for the struggling iconic newspaper.

After a spate of closures and layoffs in the latter part of the last decade, the newspaper industry appeared to find its footing over the past few years. But now that oasis of stability may be drying up.

Hard times are hitting some of the most resilient titles, and the trend indicates that things are only get worse. The decline in print advertising revenue at The New York Times has accelerated from 9 percent in the first quarter of 2016 to nearly 19 percent in the most recent quarter, writes Mathew Ingram in a Fortune story ominously headlined “The New York Times Scrambles to Avoid Print Advertising Cliff.” In announcing its financial results, the paper said it expects the falloff to continue “at a rate similar to that seen in the third quarter,” or at least 19% per quarter.



New levels of Bullish Sentiment  
Put/call ratios nearing extreme lows.  As the ratio gets smaller and smaller, that means that the amount of calls is accelerating faster than puts. When everyone is buying calls, that implies traders are extremely bullish. When everyone is very bullish, that is generally when the market reverses.

To make my point I built this chart to show three types of sentiment indicators, all are high. The way the chart works is the when the upper red window is low and the two lower green windows are high, the market is really enthusiastic, in this case perhaps too much.
 
Options traders, money managers and individual investors are all very bullish right now. Sentiment is a contrarian indicator, so the more bullish everyone is the more bearish the indicator. It isn't surprising to see these bullish numbers so high given the Trump rally, but they are reaching or have reached the danger zone. Now don't go out and sell everything today but, it is still a bull market, but the warnings are there, keep your eyes open and take profit on your high flyers. Sell Nike buy a utility etf kind of moves. Also tighten your stops.




What Works Now
ETE Energy Transfer (Ticker:ETE)
Trump likes the Dakota Pipeline project and ETE is likely to get a green light soon.

TripAdvisor
Expect a pop next week as TripAdvisor completes a deal with Expedia (Ticker: TRIP) This is a high risk play, don't bet the farm on this.
 
What I Think
I think it is crazy to try and type a blog on a tablet in an airplane couch class. 

Other than that I think this is the most amazing bull market. We might rest here but this market keeps surprising, and in a bull market it is important not to miss the bounces. 

We're in a very bullish time of the calendar year as the second half of December has significant bullish historical implications.  The 19th and 20th, however, are the weak link during this period with annualized returns on the S&P 500 (since 1950) of +3.56% and -24.88%, respectively.
 

We are overbought no question, due for a pull back? Could be true. Caution is suggested here, but don't give up this bull might wake again.

   



You can learn more about my indicators by visiting the CME4PIF school by clicking here.

Don't squint, All graphics can be enlarged by click on them.

Read My Disclaimer Here